Aave LLC’s emergency motion opposes a court ruling that has frozen around USD 73 million in ETH, that was recovered following the KelpDAO exploit on April 18. From this “Aave to Court,” the funds, intercepted by the Arbitrum team and set aside for victim compensation, were frozen on April 30 after plaintiffs with unpaid terrorism judgments against North Korea (dating back decades) claimed the assets belong to the Lazarus Group.
The legal battle
The plaintiffs hold USD 877 million in default judgments against North Korea for attacks, including the 1998 U.S. embassy bombings. The same firm representing them, Gerstein Harrow, has also tried previously to assert claims against other frozen crypto assets resulting from the hacks of Harmony and Bybit, which have since been frozen pending the outcome of appeals.
To this point, Aave argues that the attribution to North Korea is “unproven speculation” and that even if true, “temporary possession of stolen assets does not equate to ownership.” Founder Stani Kulechov compared it to “a robber stealing diamonds from a jewelry store only to have them recovered by a bystander.” Adding through an X post that “rejecting the baseless claim that stolen property title belongs to the thief.”
Aave’s motion
Aave has moved the court to vacate the restraining notice or require the plaintiffs to post a USD 300 million bond guaranteeing removal of the restraining notice. At the same time, the motion notes that over USD 300 million has already been raised through the DeFi United community-initiated recovery fund to compensate victims of the alleged crimes. The funds that are frozen were never owned by any purported wrongdoers.
ZachXBT and Santiment reports
ZachXBT, an on-chain investigator, stated, “the law firm has an evil agenda” to wait until a new Lazarus exploit happens to steal their clients’ funds using the tracing done by ZachXBT.” Adding, in relation to the lawyers’ firm, “These clowns come in say they have a claim for an alleged DPRK victim from 26 years ago that has zero relation to crypto or exploits/hacks.”
On its side, Santiment reported that Arbitrum DAO voted to free the funds, but a court ruled otherwise. The number of social media mentions of ARB increased before and after the freeze and filing by law firm.
